Our third investment: the Montesano House

[David Stone]

Investment Info:

Single-family residence buy & hold investment in Montesano.

Purchase price: $50,000
Cash invested: $20,000

Live in the heart of Montesano! Conveniently located between Beacon Elementary and Monte High, this charming craftsman features refinished hardwood floors, a large welcoming front porch, and sits on a huge corner lot! With so much charm, this makes for the perfect home!

What made you interested in investing in this type of deal?

We love single family homes, especially ones in this area of Montesano!

How did you find this deal and how did you negotiate it?

We found this deal on the MLS. We were initially under contract with a house on the west end of town. We put an offer on this house, were out bid, but the home came available after a failed inspection. We went all-in on this nicer property in a better area and on a larger lot for $80k. After the inspection, we ran our numbers and figured it was worth $50k to us. We offered and the sellers accepted!

How did you finance this deal?

We used cash from a private money investor and paid them back though a cash out refinance.

How did you add value to the deal?

We leveled the post and pillar foundation, painted the inside and out, refinished the hardwood floors and re-plumbed the entire home (it was leaking sewage).

What was the outcome?

We made the home safe and rent-ready and now rent it for $1375 a month.

Lessons learned? Challenges?

When we refinance the property to pay off our private investors, we came up short due to a low appraisal (we thought it was low and they were using foreclosure properties with winterized plumbing as comps). We ended up refinancing another property (our second investment, the McCleary house) to cover the difference and pay them off (and make them happy!) :)

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We purchased this home using Premier Realty Oly Pen